Economics in 10 easy steps

Here’s a never-to-be-repeated holiday special: all you need to know about economics in 10 easy steps. They come courtesy of the best-selling introductory economics textbook by Gregory Mankiw of Harvard University (with Joshua Gans and Stephen King co-authors of the Australian edition).

Economics is the study of how society manages its scarce resources, where ”scarce” means there are fewer resources than we’d like to be able to use.

The 10 principles are divided into 3 sections. Here is a further summary of the 10 principles:

Section 1: How people make decisions?

Principle 1: Economics is about trade-offs – efficiency vs equity

Principle 2: Opportunity cost – Joining a Univ vs Working fulltime

Principle 3: Marginal Thinking – The pricing should be in line with marginal costs

Principle 4: Incentives matter

Section 2 : How people interact?

Principle 5: Trade makes everyone better off

Principle 6: Markets are a good way to organise economic activity. Central Planning doesn’t work